Compliance

The management's statement

Chris_Mattheisen_96x96The Corporate Compliance Program applies to all bodies, organizations, directors, officers and employees of the Magyar Telekom Group, as well as to consultants, agents, representatives, and all other persons or bodies who carry out work on behalf of any company within the Group. Additionally, we expect our business partners, suppliers and customers to aid us in this effort by acting in a similarly ethical manner. As such, certain aspects of the Magyar Telekom Corporate Compliance Program, apply not just to Magyar Telekom Group employees, but also to third parties with whom we do business.

The Magyar Telekom Corporate Compliance Program has been designed to ensure that the Group conducts its business to the highest standards of awareness, training, commitment, and adherence to applicable laws and regulations. To do so requires the implementation of policies and procedures that address potential compliance risk areas together with identifiable mechanisms for reporting, investigating, monitoring, and correcting cases of suspected or actual non-compliance. It is a requirement that all employees and other effected parties guide their actions not only to the letter but also to the spirit of these guidelines.

It is critical that each of us recognises and accepts personal responsibility for each of our individual actions in complying with the Group's ethical standards. As an aid and guideline we have Group policies supported by a comprehensive and ongoing training program.

It is only through our everyday actions and behaviour consistent with these highest ethical standards that we can maintain our success. We will achieve our business objectives while maintaining our integrity and enhancing our reputation as an ethical leader in the telecommunications industry.

Christopher Mattheisen
Chief Executive Officer


Development of the Compliance Program

The Management and Board of Magyar Telekom Group are unanimous in their commitment that the Magyar Telekom Group (hereinafter ‘Magyar Telekom’ or ‘Group’) will conduct all business activities in accordance with the highest legal and ethical standards. In support of this commitment the Magyar Telekom Corporate Compliance Program (‘hereinafter ‘Compliance Program’) has been developed to create an internal culture where ‘Respect and Integrity’ is one of the most crucial values. The Compliance Program is enacted at all members companies of the Group where Magyar Telekom has effective control.

The Compliance Program applies to all bodies, organizations, directors, officers and employees of the Magyar Telekom Group, as well as to consultants, agents, representatives, and all other persons or bodies who carry out work on behalf of any company within the Group. Additionally, we expect our business partners, suppliers and customers to aid us in this effort by acting in a similarly ethical manner. As such, certain aspects of the Compliance Program, apply not just to Magyar Telekom Group employees, but also to third parties with whom we do business. The Compliance Program has been designed to ensure that the Group conducts its business to the highest standards of awareness, transparency, accountability, commitment, and adherence to applicable laws and regulations. To do so requires the implementation of policies and procedures that address potential compliance risk areas together with identifiable mechanisms for reporting, investigating, monitoring, and correcting cases of suspected or actual non-compliance.

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The elements of Compliance Program is continuously tailored to the changes in the business sector, location of operation, business circumstances, culture and risks, international best practices.

The Compliance Program is reflected in the Code of Conduct which is accepted internally by all employees, and by all suppliers through Magyar Telekom Procurement Intranet site .

The Group Compliance Officer is responsible for operation and monitoring the Compliance Programme.

Anti-corruption measures

Magyar Telekom does not tolerate intention or transaction on corruption; therefore several internal policies and procedures have been developed to prohibit and prevent bribery (including making facilitation payments).

Magyar Telekom intention is to comply with the anti-corruption rules relevant to the Group and it expects its business partners that they will not use money or other consideration paid by Magyar Telekom Group for unlawful purposes, including purposes violating anti-corruption laws, such as make or cause to be made direct or indirect payments to any public official or private person in order to assist Magyar Telekom or anyone acting on its behalf in obtaining or retaining business with, or directing business to, any person, or securing any improper advantage.

Telekom prohibits any form of corruption or bribery including but not limited to providing or accepting or promising personal advantage, kick-backs or facilitation payments.

The Group also prohibits its employees to make decisions for the employees’ benefit or that of the employees’ family, friends, associates and acquaintances.

No gift or invitation to events can be granted to a third-party where they could affect or be perceived to affect the outcome of a business transaction.

The Magyar Telekom Group does not financially or morally support political parties, political organizations or their representatives. Its charitable contribution activities are disclosed on its internet site .

Magyar Telekom does not intent to conduct any business with third parties who violate the anti-corruption regulations or the guiding principles of the Compliance Program.

Training system

In 2007 Magyar launched e-learning programs on business ethics and anti-corruption compliance. The e-learning courses consists of an introduction by Christopher Mattheisen, CEO of Magyar Telekom, an introduction to the Hungarian and international anti-corruption legislation (including U.S.; EU and OECD legislations), as well as four interactive cases built upon Magyar Telekom Code of Conduct. The business ethics programme is mandatory for all employees of the Group; to the anti-corruption e-Learning course employees are selected and invited after a risk based assessment.

Suppliers are required to register themselves on the Magyar Telekom Procurement internet site thereby acknowledging the Group’s Code of Conduct and anti-corruption clause.

Effective system of internal controls

Magyar Telekom’s management is committed to establish and maintain an adequate internal control system to ensure the reliability of the financial reports. Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in conformity with International Financial Reporting Standards (“IFRS”) as adopted by the European Union.

Transaction Level Controls describe the controls built into our business processes that have been designed and operated to ensure that material misstatements in each significant financial account and disclosure within the financial statements are prevented or detected in a timely manner. Parallel we document and evaluate the fundamental controls of internal control system (ICS) based on the methodology of Deutsche Telekom.

In line with the criteria of the adopted internal control framework, management evaluates the effectiveness of internal control system within each financial year.

Complete evaluation of our internal control system is based on the method established in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The operation of the internal control system is supported also by the independent internal audit function. Beyond tasks regarding the risk based internal audit work plan, contributes to the enhancement of the internal control processes and to the reduction of existing risks through ad-hoc audits. The Internal Audit area follows up the implementation of the measures defined on the basis of the audits. The Supervisory Board and the Audit Committee receives regular reports on the findings of the audits; measures, based on the findings and fulfillment of tasks.

Monitoring of the Compliance Program

A formal changes management system is applied continuously to monitor the design and effectiveness of the Compliance Program and to tailor it to the changes and new challenges in the business trends, environment and legislations.

The Group Compliance Officer also provides quarterly reports to the Management Committee, Board of Directors, Supervisory Board and Audit Committee on the progress and results of the Compliance Program.

External verification and certification

In 2010 Deutsche Telekom, parent company of Magyar Telekom initiated a certification process to audit the design of the Compliance Management System.  This process established the minimum requirements for a Compliance Management System and audited the appropriate implementation of these minimum requirements. Within the Magyar Telekom Group, Magyar Telekom Plc, Makedonski Telekom, T-Mobile Macedonia and Crnogorski Telekom participated in this certification process. The results are available at: http://www.telekom.com/company/at-a-glance/compliance/98946.

Similar certification project is initiated for 2013.

Internal communication with employees

The Group takes the Code of Conduct and its detailed regulation seriously and consider its enforcement to be among our highest priorities, but it is also acknowledged that it is sometimes difficult to know right from wrong. That’s why the employees are encouraged to initiate open communication through an internally available Ask me! portal.

Reporting of the violation of the Compliance Porgramme, internal regulations or laws:

Complaints and comments related to issues and violations of regulations can be submitted to Magyar Telekom Group’s Tell me!.

Contact information of Magyar Telekom Group’s Tell me!

Address:  Group Compliance Director
1013 Budapest Krisztina krt. 55. Hungary
Phone:  +36 1 458 7780
Email:  mondd.el@telekom.hu 

There is also an opportunity to submit complaints to Deutsche Telekom Group’s “Tell me!”

Contact information of Deutsche Telekom Group’s „Tell me!“

Address:  Deutsche Telekom AG
140 Friedrich-Ebert-Allee, 53113 Bonn, Germany
Telephone:  +8000 382 4835 (Monday - Friday, 9 a.m. - 5 p.m. GMT+1)
Fax:  +8000 382 4329
Email:  Tell-me@telekom.de 
Internet:  www.telekom.com/tell-me and www.telekom.de/tell-me

We would like to draw your attention that complaints to the Deutsche Telekom Group’s Tell me! may only be made without the personal data of the person you wish to complain about . Any other unlawful personal data transfer may result in civil or criminal sanctions.

Complaints and comments may be submitted anonymously.